Sinomach to head Terex Changjiang JV: Update27 April 2012
At Intermat, Cranes Today spoke to Terex Cranes’ president Kevin Bradley about the reasoning behind the company’s new deal with Sinomach, and what it will mean for Terex truck cranes manufactured in the country.
Terex and its Chinese crane business partner Luzhou Shenli recently sold a majority stake in their Changjiang crane business to China Sinomach Heavy Industry Corporation.
Terex Cranes president Kevin Bradley told Cranes Today that the company had initially entered into the joint venture with Luzhou Shenli as equal partners. The Chinese government limits foreign investors to a half share of on-the-road vehicle manufacturers. At the time of the inital deal, Terex believed this was directed at the automobile sector, and had hoped the law would change to allow it to take full ownership of the company. The anticipated change did not happen, leaving the US?firm unable to take full ownership.
Now, Sinomach will take on a controlling stake in the new joint venture setup for the truck crane business, with Luzhou Shenli surrendering over half of its 50% stake, leaving Terex the larger of the two minority shareholders in the business.
Bradley said that, with Sinomach as the controlling party, Terex’s role in the business woud be to bring technology to the venture, and to be the lead on many export markets around the world for the cranes built in the facility. He expects that cranes manufactured in the plant will carry Terex branding outside of China, but will carry Sinomach branding within the country.
A subsidiary of China’s largest machinery manufacturer, the state-controlled China National Machinery Industry Corporation, Sinomach is experienced in acquiring and reorganising Chinese engineering machinery businesses under the umbrella of its parent company.
It currently owns 28 holding companies and share-holding companies and has established joint ventures with international firms such as Hyundai, Komatsu and Martec. Terex hopes that the extra investment will help Sichuan Changjiang Engineering Crane Co (SCE) to gain a stronger foothold in the Chinese market while simultaneously expanding opportunities for overseas sales of its Changjiang truck crane products.
Sinomach already has a strong focus on developing its international business prospects, having acquired agricultural machinery component manufacturer McCormick France last year and showed interest in investing in a 50 sq mile technology zone in Idaho, US. With SCE’s current product line of 8t–160t truck cranes soon to be augmented by cranes also suitable for markets outside China, such as Terex’s new Toplift series of truck cranes, Terex believes Sinomach’s global network of sales channels and international project opportunities will serve the joint venture well.